Home values: Worst of housing downturn could be behind us

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Preliminary figures for April from CoreLogic show home values are falling at a slower rate. Photo: Glenn Hunt/Getty Images.

THE worst could be over for the nation’s housing market, with new figures showing home values are falling at half the rate they were three months ago.

The latest CoreLogic home value index reveals dwelling values across the five major capital cities fell 0.5 per cent for the month of April to date.

Home values likely fell 0.5 per cent across the major capital cities in April. Photo: Glenn Hunt/Getty Images.

That’s a significant improvement on December, when the monthly decline in values was 1.3 per cent.

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CoreLogic head of research Tim Lawless said the slowdown in the rate of decline was being led by the nation’s two biggest housing markets.

“We’re seeing the most improvement in Sydney and Melbourne, where values are falling but nowhere near as fast,” Mr Lawless said.

Home values are starting to fall at a slower rate in Sydney and Melbourne, according to CoreLogic.

He said rental yields were also continuing to improve, which could provide some incentive for property investors looking for bargains.

But he said the bad news was that the downturn had spread to cities outside of Sydney and Melbourne.

“Over the last few months, we’ve started to see markets that have been relatively sustainable slip into negative growth,” Mr Lawless said.

“That’s Brisbane and Adelaide.”

CoreLogic head of research Tim Lawless.

Preliminary figures show Brisbane home values are set to record a 0.3 per cent decline for the month of April, which would be the fifth straight month of falls.

Mr Lawless said the city was on track to record a 1.8 per cent drop in values over the past 12 months.

“That’s quite a weak outcome for Brisbane, where even though we haven’t seen a high rate of capital gains, we’ve generally seen (values) rising about 2 per cent per annum,” he said.

Brisbane home values have recorded a decline so far in April. Picture: Jennifer Dudley-Nicholson, News Corp Australia.

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Mr Lawless said the geographical broadening of the downturn could likely to attributed to the tighter credit environment.

“Housing affordability is healthy in markets like Brisbane and Adelaide, economic conditions haven’t deteriorated, and population is ramping up — particularly in southeast Queensland.

“Yet, against all those factors, we’re still seeing these markets drifting lower, which probably comes back to the slowdown in owner/occupier credit we saw in the second half of 2018 and into 2019.”

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